Trump’s Tax Cut Bill passes major committees and moves to the House
President Donald Trump’s sweeping tax bill passes major committees and moves to the House vote.
When President Donald Trump wipes out tax bills through Congress, one of the key obsessions will directly attack Americans where they live.
State and local tax credits – often abbreviated as salt – are the political flashpoints in passing the 2017 Tax Cuts and Employment Act, and are adapting again in 2025.
Salt refers to the ability to deduct taxes paid to state and local governments from an individual’s federal tax bill. The 2017 law limited that amount to $10,000. This is an amount that many taxpayers in high tax states can easily exceed.
At the time, government officials in states with democratic tendencies denounced the CAP. Andrew Cuomo in New York at the time won for the “Economic Civil War” between the Republican White House and the Blue State. But now, some Republicans in the Blue State of Congress are taking part in favour of raising the cap from $10,000 to $30,000.
The bipartisan salt caucus includes Republican lawmakers from New York, New Jersey and California, as well as Democrats from other states, including Illinois, Maryland and Connecticut.
“The current $10,000 cap unfairly punishes cups, firefighters, teachers, nurses and blue-collar merchants in high-tax states like New York,” New York Sen. Mike Lawler wrote May 16th to the Wall Street Journal editor.
“If you look at states like California, New York, New Jersey, etc. that are affected by this, it’s not 100% clear why people in Ohio and Oklahoma need to subsidize some of their amenities and other programs.”
Smetters is a protective zoning in some high-income countries, so the main reason for the very high property taxes is to give privileges to existing homeowners at the expense of new developments. “The so-called “Nimbiism.” Zoning alone in these states drives asset values and drives property taxes up. ”
But as Roller’s operations point out, many of these exact states are “donor” states, sending more money to the federal government than they would receive in the form of spending.
Some supporters found that an analysis by the lobby group, the National Association of Realtors, found in 2022 that they claimed salt deductions. The analysis found that it shows the collapse of all council districts in the country.
It is important to note that the law is still far from the finish line. Once you pass the house gauntlet, you are expected to pass the committee and hold a floor vote in the Senate. Policy details may be tweaked at any point along the way.
No matter how popular the idea of expanding deductions is, Smetters believes that few taxpayers will actually benefit from other changes made simultaneously to alternative minimum and marginal tax rates.
Additionally, the cost of tax revenue losses for the cap rises to $30,000 will be $225 billion over a decade. It’s roughly comparable to overtime, no tax on tips, and no tax on car loan interest.
Will tax bills be passed to law?
William Gale, co-director of Tax Policy Center, a joint venture between Think Tanks Tanks The Brookings Institute and Urban Institute, believes lawmakers will reach some compromise and continue to have some kind of cap.
“It seems like there’s room for compromise,” Gale told USA Today.
However, the overall law is likely to be negative for the housing market, Gale noted. A May analysis from Yale’s Nonpartisan Budget Lab found that the tax bill under consideration by the House would add $3.4 trillion to debt over the 2025-2034 window and $15.3 trillion from 2025-2055.
“The indirect effect of this is that the deficit will raise interest rates and that will flow into the mortgage market,” Gale said. “Current interest rates are difficult enough in the housing market.”
The 2017 law urged many residents of high-tax states to receive 2018 taxes in 2017. A similar push could be made this year. Some financial advisors have already counselled clients to consider paying state and local taxes in early January 2026, when the upper limit extended in early January 2026 could take effect.
